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Flashcards in Defenses Deck (42):

When can a party argue mutual mistake as a defense to the enforcement of a contract?

the contract may be voidable if 1) the mistake concerns a basic assumption on which the contract is made; 2) the mistake has a material affect on the agreed-upon exchange; and 3) the party seeking avoidance did not assume the risk of the mistake.


If only one of the parties to a contract is mistaken about facts relating to the agreement, the mistake will not prevent formation of the contract unless . . .

the nonmistaken party knew or had reason to know of the mistake made by the other party.


Where an offeror transmits an offer to an intermediary, and the intermediary transmits the offer to the offeree incorrectly, which version of the offer governs?

the version of the offer transmitted by the intermediary unless the other party knew or should have known about the mistake.


What is the result where there is a term in a contract subject to at least two possible meanings, and one of the parties was aware of the ambiguity but did not inform the other party of the ambiguity?

there is an enforceable contract, where the ignorant party's understanding of the contract prevails.


Fraud in the Inducement

where one party induces reliance by another party on facts that the inducing party knows are not true.


Are contracts which are caused by fraud in the inducement automatically void?

No, they are voidable; i.e. they are capable of being voided at the choice of the defrauded party.


When is a non-fraudulent misrepresentation voidable?

if the misrepresentation was material.


When can a minor disaffirm a contract?

at any time, so long as it was the minor who entered into the contract with the adult.


When can an adult disaffirm a contract with a minor?

if the contract was made by the adult to the minor, they cannot disaffirm and the minor can enforce the contract.


If a minor chooses to disaffirm the contract with an adult, what must she do?

she must return anything she received under the contract that still remains at the time of disaffirmance.


Can a minor disaffirm a contract for necessaries?

Yes, but she is liable for restitution for the value of benefits received.


Where a minor makes a contract, and later reaches the age of majority, may he still disaffirm?

yes, so long as he does not affirm the contract first. A contract by a minor is not automatically affirmed by his reaching the age of majority. He must somehow affirm it while over 18 to bind himself.


A person who is mentally incapacitated when a contract is first formed can either affirm or disaffirm the contract when . . .

they are lucid


Is a person who was intoxicated at the time of their entering into a contract bound by the contract?

yes, if the other party did not know of their intoxication; no, if the other party had reason to know of the intoxication. However, an intoxicated individual can affirm a contract they entered into while intoxicated once they have sobered up.


Contracts induced by duress or undue influence are _____________.



Does taking advantage of a person's economic needs considered duress?



Are threats against one's property considered duress?



The Statute of Frauds requires that certain agreements be . . .

written and signed by the party to be charged.


Do emails evincing a contract satisfy the statute of frauds?



Can several pieces of paper satisfy the statute of frauds?



Does writing on a napkin showing the particulars of the contract satisfy the statute of frauds?



Under the SoF, must a signature be handwritten?

No, it can be typed or printed, so long as it is intended to be a signature.


What can suffice to be a signature under the UCC?

a party's initials or letterhead.


Must both parties to a contract sign the contract under the SoF?

No, only the party to be charged.


Must a contract to build a building on the land be written and signed under the SoF?

No, these are not covered by the SoF because they do not create an interest in land.


________________ by the seller will take a contract out of the statute of frauds.

full performance


________________ by the buyer will take a contract out of the SoF.

partial performance


When is a writing not required under the SoF?

there are three instances where a writing is not necessary under the SoF because the terms are satisfied: 1) specially manufactured goods; 2) admissions in pleadings or court; and 3) if goods are received/accepted or paid for.


The Merchant's Confirmatory Memo rule only applies to what kind of contracts?

oral contracts between merchants.


How long does a receiver of a merchant's confirmatory memo have to object to the memo before it is binding on both parties?

10 days


What is the effect of a contract not meeting the requirements of the SoF?

the party to be charged can choose not to enforce the contract. If they choose to enforce it anyways, the statute is waived.


Where a buyer makes an oral promise to pay for real estate and there is no writing, the seller can avoid having to make a writing by . . .

conveying the land to the buyer; i.e. completing performance. Complete performance by a seller removes a contract from the statute of frauds.


Where a seller makes an oral contract to sell real estate to a buyer and there is no writing, the buyer can avoid having to make a writing by . . .

partial performance. Partial performance by a buyer to an oral sale of land contract takes a sale of real estate out of the statute of frauds.


When does partial performance of a sale of goods contract take the contract out of the statute of frauds?

where the goods are 1) specifically made; or 2) the goods have been either paid for or accepted.


An oral contract that cannot be completed within one year but has been fully performed by one party is _____________.



Is a contract with unfair prices for goods unconscionable?



A contract contains a clause which shifts the burden of risk of loss normally borne by one party to another. Is this unconscionable?



A contract contains a provision stating that the buyer takes the goods as they are and that the seller is not responsible for any defects in them. Unconscionable?



An exculpatory clause releasing a party from _____________ behavior is unconscionable, whereas an exculpatory clause releasing a party from ______________ conduct are usually upheld if the clause is not inconspicuous.

intentional wrongful; negligent


Are contractual clauses limiting liability for damages unconscionable?

Generally, no.


Unconscionability is determined by the circumstances as they existed at the time . . .

the contract was formed.


How will a court treat a contract in which there is an unconscionable provision?

the court will either 1) refuse to enforce the contract; 2) refuse to enforce the specific provision while keeping the rest of the contract enforceable; or 3) limit the application of any clause so as to avoid an unconscionable result.